On Wednesday, December 14, the Australian government said that it’s taking enough steps to improve regulation for crypto service providers. In early 2023, the government shall release a consultation paper to decide the kind of digital assets they want to regulate.
To tighten the safety net in the crypto space, the Australian government is also mulling sweeping changes in its financial services laws. The new consultation paper will form the basis of Australia’s “strategic plan” for a payments system to be passed in early 2023. Speaking on this development, Australia’s Treasurer Jim Chalmers said:
“The one constant in finance is change. It’s fast moving, dynamic and our regulatory frameworks haven’t kept up. Our reforms are about starting to fix that in pursuit of a financial system that is stronger and more secure.”
The crypto winter of 2022 and the turn of events have forced regulators to step up regulatory measures in this sector. The dramatic collapse of FTX’s crypto empire has exposed major loopholes which need to be addressed soon. Amid the recent developments, Australia seeks to strike a balance between innovation and crypto regulation. Chalmers said:
“The digital age has brought new opportunities and risks to finance. Our plan is about opening up space for further innovation while making sure we have the right regulatory approach in place to keep consumers, businesses and the system safe.”
Australia To Regulate Crypto Custody and Licensing
One of the major issues that crypto users face today is the lack of enough regulation about crypto custodians, crypto lenders, and other service providers. Thus, to safeguard consumers, the Australian government is considering cryptocurrency custody and licensing settings.
Before introducing crypto legislation, Australia is likely to consult on this framework next year. As per the plans, Australia will set up a regulatory framework for the so-called buy now, pay later schemes.
Along with Australia, we can expect more countries to unveil regulatory frameworks next year.
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